The European Central Bank (ECB) requires additional reassurance that inflation is headed back to the 2% target before it lowers interest rates further, according to President Christine Lagarde.

While disinflation is continuing in the eurozone, officials must stay alert, Lagarde said Thursday. A particular focus is the growth in services prices, which is being driven by elevated gains in wages, she said.

“We have to remain vigilant and we have to be confident that inflation is continuously down and that the data that we receive on wages, on profit, on activity, reinforce our confidence that we are on a path to win the fight,” Lagarde told Portuguese TV station RTP.

ECB officials are in no rush to follow their initial reduction in borrowing costs last month with another. Most are cautiously endorsing one or two more cuts this year, though nothing is likely to happen at their meeting on July 17-18.

While inflation slowed a touch last month, many fret about rapid pay growth and geopolitical stresses. Lagarde told the ECB’s annual retreat in Sintra, Portugal, on Monday that time is needed to asses lingering uncertainties over the path for consumer prices.

Several Governing Council members have said decisions to shift rates should be taken when there’s more information available - referring to the quarterly gatherings for which fresh economic projections are compiled.

Lagarde appeared to back up such signalling.

“We need a lot of data - I’m not sure that we are getting those data at every single monetary-policy Governing Council meeting that we have,” she said. “In theory,” however, “it could happen at any of our meetings. But on the basis of a strong set of data.”

  - Bloomberg